Alimentation Couche-Tard Inc., based in Laval, Quebec, has shifted its focus to a new acquisition target after unsuccessful attempts to purchase a French grocer and a major global convenience store chain. The company, which owns Couche-Tard and Circle K stores, revealed its intentions to acquire the Polish convenience store operator Zabka Group.
Couche-Tard has proposed a takeover offer exceeding $12 billion for a controlling interest in Zabka, valuing each share at 32 Polish zloty, approximately $11.90 Canadian dollars. If successful, this deal would mark Couche-Tard’s largest acquisition to date and align with its strategic objective to significantly expand its business operations.
Zabka, known for its extensive network of over 13,000 convenience stores in Poland and Romania, presents a promising match for Couche-Tard, which operates 17,300 stores across 27 countries, with nearly 400 outlets in Poland. Both companies share similarities in their product offerings, focusing on a wide range of beverages, snacks, and expanding into hot food items in recent years.
While Zabka emphasizes quick-serve meals, with one in every five transactions including a meal purchase, Couche-Tard’s core offerings revolve around beverages and fuel, with approximately 13,200 locations featuring gas stations. Unlike Zabka, Couche-Tard does not provide fuel services.
Couche-Tard’s CEO, Alex Miller, highlighted the complementary strengths and shared customer-centric vision driving the proposed acquisition during an analyst call. The company anticipates realizing around $250 million in cost savings within three years post the deal’s completion. The interest in Zabka has been long-standing, with Couche-Tard executives, including founder Alain Bouchard, contemplating the acquisition for over a decade.
The transaction, subject to regulatory approvals, is anticipated to conclude by December. The level of ownership Couche-Tard attains in Zabka will hinge on shareholder acceptance of the offer. Should Couche-Tard secure a minimum of 95% of Zabka’s voting rights, it has the option to delist Zabka from the Warsaw Stock Exchange, where the company went public two years ago.
The integration of Zabka into Couche-Tard’s operations remains flexible, with the possibility of Zabka continuing as a public entity on the Polish exchange or becoming fully integrated into Couche-Tard. Analysts view this move as a strategic advancement towards Couche-Tard’s long-term growth objectives, combining bold initiatives with prudent considerations for future success.